Car loans have gone from the safest consumer credit products to among the riskiest over the last 15 years as delinquencies rose more than 50%, driven by soaring car prices and rising interest rates, a new study shows.
Consumers across all income categories are struggling to make monthly car payments, according to VantageScore, a credit-scoring company.
Auto loans were once a safe haven, with drivers prioritizing payments on their transportation above other debts. But delinquencies on car loans, defined as 60 days or more past due, jumped 51.5% from the first quarter of 2010 through the first quarter of 2025. The opposite is true for credit cards, personal loans and most other forms of consumer credit.
The study found that 1.6% of total auto loans were 60 days or more past due as of July 2025, while credit card and first mortgage loan delinquencies are less than 1%. US consumers purchased about 16 million new cars last year and the majority were financed. There are close to 300 million cars on the road in America.
VantageScore found that, in relative terms, monthly car payments are increasing faster than mortgage payments.
“We’re seeing the cost of cars and the cost related to car ownership increase enormously,” Rikard Bandebo, VantageScore’s chief economist, said in an interview. “In the past five years, it has increased even faster.”
Since 2019, new car prices have risen more than 25% and now top $50,000 on average, according to researcher Cox Automotive. The average monthly payment on a new car was $767 in the third quarter, and one in five borrowers pay more than $1,000 a month, according to automotive researcher Edmunds.com. Interest rates on new car loans now top 9%, exacerbating an automotive affordability crisis.
“That’s a double whammy,” Bandebo said. “You’ve been hit by the increased cost of the car and then the financing cost of the car.”
No income group is immune. Prime and near-prime borrowers, who typically have good credit scores, are actually missing car payments at a faster rate than subprime consumers since lenders tightened financing criteria for the lowest-rung borrowers three years ago, the study found.
“The higher income you have, you tend to at least feel that you can own a more expensive car,” Bandebo said.
The average auto loan balance has grown 57% since 2010, outpacing all other credit products, VantageScore found.
To get a more affordable monthly payment, car buyers are stretching the length of loans to seven years or more. That is leaving an increasing number of consumers “upside-down” on their loans, meaning they owe more than the car is worth.
The trend of missing car payments is unlikely to reverse with American consumers continuing to buy more expensive trucks and sport-utility vehicles. Automakers are also offering fewer affordable models.
“Consumers now are in a more precarious position than they’ve been since the last recession,” Bandebo said. “We’ve seen this growing trend over the last several years of more and more consumers struggling to make ends meet, and it’s looking like that trend is going to continue into next year.”
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